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UGI CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AMENDED AND RESTATED EFFECTIVE OCTOBER 1, 1996
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ARTICLE I
BACKGROUND AND STATEMENT OF PURPOSE
Sec. 1.01 Background. The Senior Executive Retirement Plan for
Certain Employees of UGI Corporation and its Subsidiaries and Affiliates (the
"Senior Plan") was established effective as of January 1, 1985. Until April 10,
1992, it was maintained by UGI Utilities, Inc. (formerly named, prior to April
10, 1992, UGI Corporation and hereinafter sometimes referred to as "UGI
Utilities"). On April 10, 1992, UGI Utilities became a subsidiary of New UGI
Corporation which was renamed UGI Corporation ("UGI") on the same date. As of
April 10, 1992, UGI assumed sponsorship of the Senior Plan and all obligations
of UGI Utilities thereunder, and amended and restated the Senior Plan to reflect
the transfer of Senior Plan sponsorship. UGI now wishes to amend the Senior Plan
to eliminate participation by employees of AmeriGas Propane, Inc., to re-name
the Senior Plan "The UGI Corporation Supplemental Executive Retirement Plan"
("SERP") and to make other changes. Accordingly, pursuant to the authority
granted under Section 8.01 of the Senior Plan, it is hereby amended and restated
in its entirety as of October 1, 1996.
Sec. 1.02 Purpose. The SERP is maintained to provide a fair and
competitive level of retirement benefits to certain management and other highly
compensated employees who have, by operation of laws and regulations relating to
qualified pension benefit plans, experienced a reduction in prospective
retirement benefits under the Retirement Income Plan for Employees of UGI
Utilities, Inc. (the "Pension Plan") and the UGI Utilities, Inc. Savings Plan
and, from the Effective Date through September 30, 1996, the AmeriGas Propane,
Inc. Savings Plan, collectively, (the "Savings Plan"). The Pension Plan and the
Savings Plan are hereinafter referred to collectively as the "Plans". The
benefits under the SERP are designed to compensate the Participants hereunder
for the loss of benefits under the Plans where such loss is attributable to (i)
the rules under Sections 414(s) and 415 of the Code which prevent the
Participant's deferred compensation from being taken into account under the
Plans, (ii) the limitations imposed under Section 401(a)(17) of the Code on the
amount of the Participant's current (non-deferred) compensation that may be
taken into account under the Plans, (iii) the limitations imposed under Section
415 of the Code on the benefits that may be paid to the Participant under the
Pension Plan or the contributions that may be made on behalf of the Participant
under the Savings Plan (or under a combination of the Plans), (iv) the
limitations imposed under Sections 401(k) and 402(g) of the Code on the
Participant's ability to make elective deferral contributions under the Savings
Plan, (v) the limitations imposed under Section 401(m) of the Code on the
ability of UGI and other
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participating employers to match Participant elective deferrals under the
Savings Plan or (vi) any combination of the foregoing. In addition, the benefits
under the SERP are also designed to compensate certain terminated employees by
taking into account periods of time during which payments are made under the UGI
Corporation Senior Executive Severance Pay Plan for purposes of the Plans that
would ordinarily be excluded from consideration. To address these purposes,
certain employees of UGI and other participating employers will be provided with
supplemental benefits to compensate them for the benefits that would have been
otherwise payable from the funding vehicles associated with the Plans were it
not for the limitations described above.
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ARTICLE II
DEFINITIONS
Sec. 2.01 "Annual Bonus Plan" shall mean the UGI Corporation
Annual Bonus Plan or the UGI Utilities, Inc. Annual Bonus Plan, as amended
from time to time, and any successor plans, and for fiscal years through
1996, the AmeriGas Propane, Inc. Annual Bonus Plan.
Sec. 2.02 "Board" shall mean the Board of Directors of UGI.
Sec. 2.03 "Category A Participant" shall mean each Employee who
participates in the SERP pursuant to the provisions of Section 3.01 hereof.
Sec. 2.04 "Category B Participant" shall mean each Employee who
is designated a Participant in the SERP pursuant to the provisions of Section
3.02 hereof.
Sec. 2.05 "Code" shall mean the Internal Revenue Code of 1986,
as amended.
Sec. 2.06 "Committee" shall mean the Board, any committee
designated by the Board to which the Board delegates its authority and
responsibility hereunder, or, if the Board delegates only a portion of its
authority and responsibility hereunder to any such committee, then the Board as
to its retained authority and responsibility and such committee as to the
portion of the authority and responsibility delegated to it by the Board.
Sec. 2.07 "Deferred Earnings" shall mean so much of an Employee's
compensation payable under the applicable Annual Bonus Plan as would otherwise
be taken into account under the Plans, but which is not taken into account under
the Plans due to an election by the Employee to have such compensation deferred
to and paid in a subsequent year, excluding compensation payable under the
applicable Annual Bonus Plan for years beginning prior to the Effective Date.
Sec. 2.08 "Effective Date" shall mean January 1, 1985.
Sec. 2.09 "Employee" shall mean any person in the employ of UGI or
another participating employer other than a person (i) whose terms and
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conditions of employment are determined through collective bargaining with a
third party or (ii) who is characterized as an independent contractor by UGI no
matter how characterized by a court or government agency, and no retroactive
characterization of an individual's status for any other purpose shall make an
individual an "Employee" for purposes hereof unless specifically determined
otherwise by UGI for the purposes of this Plan.
Sec. 2.10 "Excess Earnings" shall mean that portion of an
Employee's compensation from UGI or another participating employer that is not
permitted to be taken into account under the Plans by operation of Section
401(a)(17) of the Code or any successor thereto, excluding any such compensation
earned when the Employee was not a Participant.
Sec. 2.11 "Participant" shall mean any Category A Participant
and any Category B Participant.
Sec. 2.12 "Pension Plan" shall mean the Retirement Income Plan
for Employees of UGI Utilities, Inc., as currently in effect and as it may
hereafter be amended, and any plan designated by the Board as a successor
thereto.
Sec. 2.13 "Pension Plan Earnings" shall mean so much of an
Employee's compensation from UGI or another participating employer as is taken
into account in determining benefits or contributions under the Pension Plan for
the relevant period.
Sec. 2.14 "Salary Continuation Period" shall mean the Salary
Continuation Period, as defined in Section 2.17 of the UGI Corporation Senior
Executive Employee Severance Pay Plan, of a Category B Participant.
Sec. 2.15 "Savings Plan" shall mean the UGI Utilities, Inc.
Savings Plan and, from the Effective Date through September 30, 1996, the
AmeriGas Propane, Inc. Savings Plan, as they may thereafter be amended, and any
plans designated by the Board as successors thereto.
Sec. 2.16 "SERP" shall mean the UGI Corporation Supplemental
Executive Retirement Plan as set forth herein, and as the same may hereafter
be amended as well as prior iterations of the Senior Plan if the text so
requires.
Sec. 2.17 "Termination for Cause" shall mean termination of
employment by reason of misappropriation of funds, habitual insobriety,
substance abuse, conviction of a crime involving moral turpitude, or gross
negligence in the performance of duties, which gross negligence has had a
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material adverse effect on the business, operations, assets, properties or
financial condition of UGI and its subsidiaries and affiliates, taken as a
whole.
Sec. 2.18 "UGI" shall mean, prior to April 10, 1992, UGI
Utilities. From and after April 10, 1992, "UGI" shall mean UGI Corporation
(formerly named New UGI Corporation).
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ARTICLE III
PARTICIPATION
Sec. 3.01 Category A Participants. Each Employee who is
eligible to receive a bonus under the applicable Annual Bonus Plan shall be a
Category A Participant.
Sec. 3.02 Category B Participants. Each person who was
eligible to receive benefits under the UGI Corporation Senior Executive
Severance Pay Plan due to termination of employment shall be a Category B
Participant.
Sec. 3.03 Multiple Participation. Any Employee may be a
Category A and/or Category B Participant.
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ARTICLE IV
BENEFITS
Sec. 4.01 Category A UGI Retirement Benefit. Each Category A
Participant who is entitled to a benefit under the Pension Plan shall receive
an annual benefit under the SERP equal to (a) reduced by (b), where:
(a) is the annual benefit that would have been produced under
the Pension Plan if (i) the Participant's Excess Earnings (without
regard to the limitations set forth in Section 401(a)(17) of the
Code) and Deferred Earnings had been taken into account and (ii) the
limitations set forth in Section 415 of the Code (or its successor)
were inoperative; and
(b) is the annual benefit that the Participant is entitled to
receive under the Pension Plan.
Sec. 4.02 Category A Savings Benefit. Each Category A Participant
who has contributed the maximum amount permissible under the Savings
Plan shall receive a benefit under the SERP equal to the sum of the
annual benefits described in clauses (a) and (b), where:
(a) is an annual amount equal to the difference between the
Participant's annual Employer Matching Contribution under the
Savings Plan, and the amount of the Employer Matching Contribution
which would have resulted for that year if (i) the Participant's
Excess Earnings (without regard to the limitations set forth in
Section 401(a)(17) of the Code) and Deferred Earnings had been taken
into account, (ii) the limitations set forth in Section 415 of the
Code (or its successor) were inoperative, (iii) the limitations set
forth in Section 402(g) of the Code (or its successor) were
inoperative and (iv) any cutbacks of contributions to the Savings
Plans that were required to comply with nondiscrimination tests set
forth in Sections 401(k) and/or 401(m) of the Code (or their
successors) had not been made, beginning as of the
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date the Participant became a Category A Participant; and
(b) an amount which represents an increase or decrease in the
Participant's cumulative benefit described in Section 4.02 (a) as of
the end of each Savings Plan Year ("Cumulative Savings Benefit").
The amount of the increase or decrease is equal to the product
obtained by multiplying the Participant's Cumulative Savings Benefit
by the Participant's individual rate per annum. The individual rate
per annum is determined by dividing (X) by (Y), where (X) is the
total of all actual gains and losses reported on the Participant's
Savings Plan portfolio for the Savings Plan Year, measured on the
last day of the Savings Plan Year, and (Y) is the sum of (i) the
Participant's beginning balance on the first day of the Savings Plan
Year and (ii) all contributions to the Participant's account during
the Savings Plan Year.
Sec. 4.03 Category B UGI Retirement Benefit. Each Category B
Participant who is (or was) a Participant in the Pension Plan shall receive
an annual benefit under the SERP in an amount equal to (a) reduced by (b),
where:
(a) is the annual benefit that the Participant would have
received under the Pension Plan if the Salary Continuation Period
were taken into account in determining the Participant's Credited
Service under the Pension Plan (such benefit to be determined
without regard to the limitations set forth in the Code); and
(b) is the Participant's annual benefit under the Pension Plan
determined without regard to the limitations set forth in the Code.
Sec. 4.04 Category B Savings Benefit. Each Category B Participant
shall receive a benefit under the SERP in an amount equal to the Participant's
Employer Matching Contribution(s) under the Savings Plan which would have been
made had the Participant been eligible to participate in the Savings Plan and
make Employee Elective Deferral Contributions to the Savings Plan during the
Salary Continuation Period equal to the same percentage of his or her annual
compensation (determined as of the day of his or her termination of
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employment) that he or she had designated immediately prior to his or her
termination of employment.
Sec. 4.05 Benefit Entitlement. A Participant shall not be
entitled to receive a benefit under the SERP if he or she is not entitled to
receive a benefit under the Pension Plan, or where applicable, the Savings
Plan.
Sec. 4.06 Divestiture. Each Participant shall be divested of,
and shall immediately forfeit, any benefit to which he or she is otherwise
entitled under the SERP if the Participant's employment is Terminated for
Cause.
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ARTICLE V
FORM AND TIMING OF BENEFIT DISTRIBUTION
Sec. 5.01 General Rule for Form of Benefit Distributions. Unless
the Participant irrevocably elects otherwise, benefits payable under the SERP
shall be paid in the same form, to the same person, as benefits under the
Pension Plan; provided, however, that the benefits payable under Sections 4.02
and 4.04 shall be paid in the same form, to the same person, as the benefits
under the Savings Plan. If benefits are payable under the Preretirement Survivor
Annuity provisions of the Pension Plan, the benefits payable hereunder shall be
in the same form (unless the Participant elects otherwise pursuant to Section
5.02); provided, however that if any portion of the Participant's benefit
hereunder is payable under the Preretirement Survivor Annuity provisions of the
Pension Plan, the Participant's spouse shall be entitled to an additional annual
benefit of an amount equal to (i) reduced by (ii) where (i) is the annual
Preretirement Survivor Annuity benefit under the Pension Plan determined as if
the Participant had been employed by UGI during the Salary Continuation Period
and (ii) is the actual annual Preretirement Survivor Annuity benefit under the
Pension Plan.
Sec. 5.02 Alternate Mode of Benefit Distribution. Any Participant
(or a Participant's spouse in the event benefits are payable following the
Participant's death) may irrevocably elect to receive (i) payment of benefits
under this Plan in a specified form or forms available to the Participant under
the Pension Plan or Savings Plan, as applicable; or (ii) an actuarially
equivalent single sum payment. Any such election shall be made no later than the
date such individual receives, or begins to receive, benefits under the Pension
Plan or Savings Plan, as applicable. The Board shall approve, and may from time
to time change, the tables, methods and assumptions pursuant to which such
actuarial equivalencies may be calculated.
Sec. 5.03 Small Benefit Payments. Notwithstanding any other
provision of the SERP, if the actuarial equivalent lump sum value of the
Participant's benefit, determined as of the date such Participant terminated
employment, is less than such amount as the Committee may specify, such
benefit (or the remainder of the benefit if benefit payments have commenced
in accordance with the provisions of Section 5.01 and the Committee, in its
discretion, applies this Section 5.03 to benefits in pay status) may be paid,
at the discretion of the Committee, in a single sum payment.
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Sec. 5.04 Timing of Benefit Distributions. In the event a
Participant fails to elect a form of payment under Section 5.02 prior to the
beginning of the calendar year in which benefits otherwise become payable
hereunder, benefits shall be paid, or commence to be paid, to such Participant
in the calendar year following the year in which benefits are otherwise payable
hereunder.
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ARTICLE VI
FUNDING OF BENEFITS
Sec. 6.01 Source of Funds. UGI's obligation hereunder shall
constitute a general, unsecured obligation, payable solely out of its general
assets, and no Participant shall have any right to any specific assets of UGI or
any trust established by UGI to fund such obligations.
Sec. 6.02 Participant Contributions. There shall be no
contributions made by Participants under the SERP.
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ARTICLE VII
THE COMMITTEE
Sec. 7.01 Appointment and Tenure of Committee Members. The
Committee shall consist of one or more persons who shall be appointed by and
serve at the pleasure of the Board. Any Committee member may resign by
delivering his or her written resignation to the Board. Vacancies arising by
the death, resignation or removal of a Committee member may be filled by the
Board.
Sec. 7.02 Meetings; Majority Rule. Any and all acts of the
Committee taken at a meeting shall be by a majority of all members of the
Committee. The Committee may act by vote taken in a meeting (at which a
majority of members shall constitute a quorum). The Committee may also act
by unanimous consent in writing without the formality of convening a meeting.
Sec. 7.03 Delegation. The Committee may, by majority decision,
delegate to each or any one of its number, authority to sign any documents on
its behalf, or to perform ministerial acts, but no person to whom such authority
is delegated shall perform any act involving the exercise of any discretion
without first obtaining the concurrence of a majority of the members of the
Committee, even though such person alone may sign any document required by third
parties. The Committee shall elect one of its number to serve as Chairperson.
The Chairperson shall preside at all meetings of the Committee or shall delegate
such responsibility to another Committee member. The Committee shall elect one
person to serve as Secretary to the Committee. All third parties may rely on any
communication signed by the Secretary, acting as such, as an official
communication from the Plan Administrator.
Sec. 7.04 Authority and Responsibility of the Committee. The
Committee shall have only such authority and responsibilities as are delegated
to it by the Board or specifically provided herein. Among those delegable
authorities and responsibilities are:
(a) maintenance and preservation of records relating to
Participants, former Participants, and their beneficiaries;
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(b) preparation and distribution to Participants of all
information and notices required under Federal law or the provisions
of the SERP;
(c) preparation and filing of all governmental reports and
other information required under law to be filed or published;
(d) construction of the provisions of the SERP, to correct
defects therein and to supply omissions thereto;
(e) engagement of assistants and professional advisers;
(f) arrangement for bonding, if required by law; and
(g) promulgation of procedures for determination of claims for
benefits.
Sec. 7.05 Compensation of Committee Members. The members of the
Committee shall serve without compensation for their services as such, but all
expenses of the Committee shall be paid or reimbursed by UGI.
Sec. 7.06 Committee Discretion. Any discretion, actions, or
interpretations to be made under the SERP by the Committee on behalf of UGI or
any other participating employer shall be made in its sole capacity, not acting
in a fiduciary capacity, need not be uniformly applied to similarly situated
individuals, and shall be final, binding, and conclusive on the parties.
Sec. 7.07 Indemnification of the Committee. Each member of the
Committee shall be indemnified by UGI against costs, expenses and liabilities
(other than amounts paid in settlement to which UGI does not consent) reasonably
incurred by him or her in connection with any action to which he or she may be a
party by reason of his or her service as a member of the Committee, except in
relation to matters as to which he or she shall be adjudged in such action to be
personally guilty of gross negligence or willful misconduct in the performance
of his or her duties. The foregoing right to indemnification shall be in
addition to such other rights as the Committee member may enjoy as a matter of
law or by reason of insurance coverage of any kind, but shall not extend to
costs, expenses and/or liabilities otherwise covered by insurance or that would
be so covered by any insurance then in force if such insurance contained a
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waiver of subrogation. Rights granted hereunder shall be in addition to and not
in lieu of any rights to indemnification to which the Committee member may be
entitled pursuant to the by-laws of UGI. Service on the Committee shall be
deemed in partial fulfillment of the Committee member's function as an employee,
officer and/or director of UGI, if he or she serves in that capacity as well as
in the role of Committee member.
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ARTICLE VIII
AMENDMENT AND TERMINATION
Sec. 8.01 Amendment. The provisions of the SERP may be amended at
any time and from time to time by a resolution of the Board for any reason
without either the consent of or prior notice to any Participant; provided,
however, that no such amendment shall serve to reduce the benefit that has
accrued on behalf of a Participant as of the effective date of the amendment.
Sec. 8.02 Plan Termination. While it is UGI's intention to
continue the SERP indefinitely in operation, the right is, nevertheless,
reserved to terminate the SERP in whole or in part at any time for any reason
without either the consent of or prior notice to any Participant; provided,
however, that no such termination shall serve to reduce the benefit that has
accrued on behalf of a Participant as of the effective date of the
termination.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
Sec. 9.01 Nonalienation of Benefits. None of the payments, benefits
or rights of any participant under the SERP shall be subject to any claim of any
creditor, and, in particular, to the fullest extent permitted by law, all such
payments, benefits and rights shall be free from attachment, garnishment,
trustee's process, or any other legal or equitable process available to any
creditor of such Participant. No Participant shall have the right to alienate,
anticipate, commute, pledge, encumber or assign any of the benefits or payments
which he or she may expect to receive, contingently or otherwise, under the
SERP, except any right to designate a beneficiary or beneficiaries in connection
with any form of benefit payment providing benefits after the Participant's
death.
Sec. 9.02 No Contract of Employment. Neither the establishment of
the SERP, nor any modification thereof, nor the creation of any fund, trust or
account, nor the payment of any benefits shall be construed as giving any
Participant or Employee, or any person whomsoever, the right to be retained in
the service of UGI or any other participating employer, and all Participants and
other Employees shall remain subject to discharge to the same extent as if the
SERP had never been adopted.
Sec. 9.03 Severability of Provisions. If any provision of the
SERP shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions hereof, and the SERP shall be construed
and enforced as if such provision had not been included.
Sec. 9.04 Heirs, Assigns and Personal Representatives. The SERP
shall be binding upon the heirs, executors, administrators, successors and
assigns of the parties, including each Participant, present and future. Unless
the Committee directs otherwise, UGI shall require any successor or successors
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of UGI, or a division or
Affiliate thereof, (i) to acknowledge expressly that this SERP is binding upon
and enforceable against such successor in accordance with the terms hereof, (ii)
to become jointly and severally obligated with UGI to perform the obligations
under this SERP, and (iii) to agree not to amend or terminate the plan for a
period of three (3) years after the date of succession without the consent of
the affected Participant.
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Sec. 9.05 Headings and Captions. The headings and captions
herein are provided for reference and convenience only, and shall not be
considered part of the SERP, and shall not be employed in the construction of
the SERP.
Sec. 9.06 Gender and Number. Except where otherwise clearly
indicated by context, the masculine and the neuter shall include the feminine
and the neuter, the singular shall include the plural, and vice-versa.
Sec. 9.07 Controlling Law. The SERP shall be construed and
enforced according to the laws of the Commonwealth of Pennsylvania, exclusive
of conflict of law provisions thereof, to the extent not preempted by Federal
law, which shall otherwise control.
Sec. 9.08 Payments to Minors, Etc. Any benefit payable to or for
the benefit of a minor, an incompetent person or other person incapable of
receipting therefor shall be deemed paid when paid to such person's guardian or
to the party providing or reasonably appearing to provide for the care of such
person, and such payment shall fully discharge UGI, the Board, the Committee and
all other parties with respect thereto.
Sec. 9.09 Reliance on Data and Consents. UGI, the Board, the
Committee, all fiduciaries with respect to the SERP, and all other persons or
entities associated with the operation of the SERP, and the provision of
benefits thereunder, may reasonably rely on the truth, accuracy and completeness
of all data provided by the Participant, including, without limitation, data
with respect to age, health and marital status. Furthermore, UGI, the Board, the
Committee and all fiduciaries with respect to the SERP may reasonably rely on
all consents, elections and designations filed with the SERP or those associated
with the operation of the SERP by any Participant, or the representatives of any
such person without duty to inquire into the genuineness of any such consent,
election or designation. None of the aforementioned persons or entities
associated with the operation of the SERP or the benefits provided under the
SERP shall have any duty to inquire into any such data, and all may rely on such
data being current to the date of reference, it being the duty of the
Participants to advise the appropriate parties of any change in such data.
Sec. 9.10 Lost Payees. A benefit shall be deemed forfeited if the
Board or the Committee is unable to locate a Participant to whom payment is due;
provided, however, that such benefit shall be reinstated if a claim is made by
the proper payee for the forfeited benefit.
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IN WITNESS WHEREOF, and as evidence of its adoption of the Plan, the
Company has caused the same to be executed by its duly authorized officers and
its corporate seal to be affixed hereto as of the lst day of May, 1998.
Attest: UGI CORPORATION
_________________________ By: __________________________
Brendan P. Bovaird Lon R. Greenberg
Corporate Secretary Chairman, President, and
Chief Executive Officer
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